The funded status of S&P 1500 companies' pension plans was 82% as of June 30, down five percentage points from two months earlier but up seven points from the end of 2008, according to a Mercer study.
The aggregate deficit among the S&P 1500 plans was $245 billion at the end of June, compared with a deficit of $167 billion as of April 30 and $409 billion on Dec. 31, according to a Mercer news release.
The two-month decline in funded status was driven by declining corporate bond yields and Treasury values, which increased liabilities.
“The changes in funded status of plans will not be recognized in company financial statements until the next financial year end,” which is Dec. 31, 2009, for many companies, Adrian Hartshorn, a member of Mercer's Financial Strategy Group, said in the news release. “However, many companies will be starting to set budgets for 2010. There are going to be some tough decisions over the coming months, with companies seeking to balance the demands of investing for the economic recovery and maintaining sufficient working capital to meet short-term expenditure.”
